No Exceptions: Bill Pay Processing Problems Cost $720 Million a Year

NACHA said its 2012 Exceptions Benchmarking Study shows that while just 0.58% – or about one in 200 – bill payments were not able to be posted accurately upon receipt by billers in 2011, that added up to 130 million payments.

And handling those exceptions costs the industry about $720 million annually, NACHA, the Electronics Payment Association said. NACHA’s Council for Electronic Billing and Payment said the 2012 exception rate was up from the 0.4% recorded in the previous study in 2007.

Missing or invalid consumer account numbers are the leading cause of exceptions for billers, the CEBP said. Processing differences top the list for processors, the council said.

A lack of standard procedures for dealing with incorrect account numbers entered by consumers was one problem cited in the report, which noted that some processors notify the consumers, while others try to edit the number and others send a paper check.

“Although the percentage of exceptions may appear inconsequential, volume is high, and the impact on billers, processors, financial institutions, small businesses, and even consumers is significant,” said Kathy Romano, director of Payment Processing for Verizon’s landline customer business and member of CEBP.

“Exceptions require someone to manually resolve issues, creating additional expense for corporations and processing organizations. More importantly, consumers’ payments will be delayed in processing, sometimes resulting in late fees or even service impacts,” Romano said.

“In order to help reduce the number of bill payment exceptions, sharing information, standardizing processes, and educating consumers is critical,” the report said.

The report documents volume, causes and costs of bill payment exceptions across several payment channels and is available online.